G.H.Guttal J.
1. The applicants are the shareholders of Apsara Cinema Pvt. Ltd., respondent No. 2 hereinafter referred to as the company. For the sake of convenience, the applicants are referred to as petitioners. Petitioner No.2, Balchand Choraria, is the constituted attorney of petitioner No. 1. Respondents Nos. 2 to 16 are also shareholders. The two sets of shareholders represent rival groups. company Application No. 136 of 1988 of s1988 are also addressed to VIP Enterprises and REK Exhibitors respectively because certain reliefs affecting their contracts of exhibition of movie films in Apsara Cinema are sought. In these judge's summonses taken out under section 402 of the Companies Act, hereinafter referred to as 'the Act', the applicants seek an order that the agreements dated March 20, 1987, and February 12, 1987, with VIP Enterprises and REK Exhibitors be set aside and an administrator for the company be appointed.
2. The facts out of which these applications arise are, briefly, these:
On July 22, 1972, the company, by a general power of attorney, authorised petitioner No. 2 and respondent No. 5 to conduct and supervise jointly the business of the company. The authority extended, inter alia, to:
(a) appointment and dismissal of the staff;
(b) negotiation and the execution of the contracts of exhibition of movie films at Apsara Cinema;
(c) opening and operating bank accounts;
(d) performance of the contracts entered into by the company; and
(e) disposal of the property of the company.
3. By a resolution passed at the meeting of the board of directors held on June 3, 1983, the power of attorney was cancelled. On July 16, 1983, the applicants filed Company Petition No. 393 of 1983 under sections 397, 398 and 402 of the Act. the revocation of the power of attorney was one of acts of oppression complained of . The revocation of the power of attorney of were making secret profits by entering into contracts and granting playing time to different persons without the knowledge of the petitioners. A judge's summons, being Company Application No 852 of 1983, was taken out for interim reliefs of appointment of administrator under section 402 of the Act. Parekh j., by his order dated March 3, 1984, rejected the application against which the petitioners preferred Appeal No. 168 of 1984 and took out Notice of Motion No. 560 of 1984 before the Division Bench on March 29, 1984. the petitions and the respondents filed consent terms. On the application of the petitions who were the appellants, no order was made on the notice of motion. By consent of the parties to Company Petition No. 393 of 1983, the petition was allowed to be withdrawn. An order was made in terms of the minutes the substance of which is as under:
(a) The company shall, in a meeting to be held on March 29, s1984, resolve to grant power of attorney jointly in favour of petitioner No. 2 and respondent No. 5 on the same terms as the revoked power of attorney except that the power of attorney shall not be irrevocable.
(b) The company shall execute the power of attorney accordingly.
(c) The company shall continue to be managed by the board of disposal of property or granting of playing time at Apsara Cinema, the same shall be referred to the sole determination of Girish Gala. If Girish Gala is unable or unwilling, the difference shall be referred to Anthony Lewis.
(d) Gala shall be appointed additional director of the company and shall be free to to attend any meeting of the board of directors ar which petitioner No. 1 may not be able to attend. the board shall not pass any resolution objected to by Gala.
4. The affairs of the company continued to be managed by the four directors, viz., petitioner No. 1, respondent No. 4, respondent No. 5 and 1986. During this time, the bank accounts were operated under the signatures of petitioner No. 2 and respondent No. 5 in accordance with the consent order.
5. Gala died in 1985 and Anthony Lewis stood substituted in his place by operation of the consent order. Disputes started once again in December, 1986. On December 20, 1986, petitioner No. 2 declined to sign five cheques sent to him by respondent No. 5. The cheques were in favour of VIP Enterprises. Petitioner No. 2 declined to sign them on the score that VIP Enterprises were indebted to the company in the sum of Rs. 1,33,750. 58 and no payment should be made to VIP Enterprises until this debt of the company was repaid. respondent No. 5, on the other than, alleged that petitioner No. 2 was adopting an obstructive attitude in regard to the management of the company. Since a dispute about the liability of the company lot pay money to VIP Enterprises had arisen, the petitioner suggested a reference to Anthony Lewis under the consent order.
6. Respondent No.. 16 convened a meeting of the board of directors on January 17, 1987. At this meeting, the power of attorney in favour of petitioner No. 2 was cancelled and the power of attorney was granted in favour of respondent No. 16, The petitioners were out of Bombay form January 14, 1987, when the notice of the meeting was posted, and returned to Bombay only on January 25, s1987. On their return, they received a letter dated January 19, 1987, from respondent No. 1 an learnt that the power of attorney was canceled at the aforementioned meeting of the board of directors.
7. The petitioners then wrote a letter to Anthony Lewis on January 31, 1987, and requested him to resolve the dispute arising out of the cancellation of the power of attorney in favour of petitioner No. 2. Anthony Lewis, by his letter dated March 2, s1987, requested the directors, viz., petitioner No. 1, petitioner No. 2, respondents Nos. 4 and 16, to convene a meeting for the purpose of passing a resolution in accordance with the directions that he was likely to issue in respect of the disputes referred to him. The petitioners called a meeting but the respondents did not attend. No business was, therefore, transacted for want of quorum.
8. As this stage, a second round of litigation consisting of certain applications in Company Petition No. 393 of 1983 commenced. The petitioners filed judge's summons, being Company Application No. 95 of 1987 and prayed, among other things, for the relief of restoration of the power of attorney in the joint names of petitioner No. 2 and respondent No. 5. On March 24, s1987, Variava J., by an ad interim order on this application, restrained respondednt No. 16 form exercising any power under the power of attorney granted by the company in his sole name. All the respondents were restrained form entering into any 'playing time' agreements, operating bank accounts and so on. Respondent No. s16 who held the power of attorney nevertheless operated the bank account of the company, thereby violating the order of Variava J. dated March 24, 1987. Therefore, the petitioners filed Company Application No. 129 of 1987 and sought an order that respondent No. 16 be punished for having committed contempt of this court. This application was disposed of by an order dated September 1, 1987, by Mrs. Manohar J. Respondent No. 16 tendered an unconditional apology which accepted. The judge's summons was made absolute
9. The judge's summons, being Company Application No. 95 of 1987 on which Variava J. had made the ad interim order dated March 24, 1987, was heard by Mrs. Manohar J. By her order dated September 1, s1987, the judge's summons was made absolute. The power of attorney in favour of respondents Nos. 2 and 5 was restored and that in favour of respondent No. 16 cancelled.
10. Against this order, the respondents preferred an appeal, being Appeal No. 1136 of 1987, and by Notice of Motion No.2667 of 1987 sought certain interim reliefs. The notice of motion was dismissed on November 16, 1987, by the Division Bench with the observation that the parties are at logger- heads, and do not have the interest of the company at heart.
11. Meanwhile, respondent No. 5 sent 43 cheques for the signature of petitioner No. 2. these s43 cheques were for payments to VIP Enterprises. Petitioner No. 2 did not sign the cheques, but inspected the records of the Company and discovered that respondent No. 5 had under his signature entered into playing time agreements with VIP Enterprises and REK Exhibitors and extended them form time to time. they also found that respondent No. 5 had entered into such agreements on March 20, 1987 (104 weeks), and on February 12, 1987 (100 weeks), with VIP Enterprises and REK Exhibitors respectively.
12. According to the petitioners, the agreements dated March 20, 1987, and February 12, 1987, are ante-dated documents, actually entered into after the order dated March 24, 1987, referred to above thereby violating the injunction granted by Variava J. This necessitated Company Application No. 23 of 1988 for action under the Contempt of Courts Act,I had adjourned this application by three weeks.
13. After November 2, 1987, the respondents did not send any cheques for the signature of petitioner No. 2 Although there was no resolution of the board of directors authorising change of advocate of the company, by a let-ter dated December 28, 1987, Law Charter - a firm of advocated - conveyed that they had been aothorised to represent the company in Appeal No. 1136 of 1987.
14. Since respondents Nos. 2 to 16 had refused to permit the petitioners to inspect the books of account, the petitioners visited the Sarasvat Co-operative Bank and learnt form the manager that VIP Enterprises, in a suit against the company, had secured certain orders. The petitioners, then, learnt that a receiver for the money collected by the company had been appointed by the Bombay City Civil Court in Suit No. 8242 of 1987. In the Suit, VIP Enterprises had sought a declaration that the amounts collected by the company at the box office were held in trust for VIP Enterprises. The affidavit-in-reply to the notice of motion for appointment of the receiver of these collections was by respondent No. 16 in his capacity as chairman of the company. He averred that the company was unable to pay the money to VIP Enterprises, as petitioner No. 2 had refused to sign the cheques. the affidavit did not raise any objections to the payment of money to VIP Enterprises, as petitioner No. 2 had refused to sign the cheques. the affidavit did not raise any objections to the payment of money to VIP Enterprises. the notice of motion was made absolute and a receiver for the cash collections for 104 weeks was appointed. there was no resolution of the company authorising respondent No. 16 to make the affidavit-in reply in Suit No. 8242 of 1987 in the Bombay City Civil Court. According to the petitioners, the order of the Bombay City Civil Court was obtained in collusion with respondents Nos. 2 to 16 and VIP Enterprises which would be clear form the fact that there was no opposition to the appointment of the receiver and the suppression of the orders of this court in Company Petition No, 393 of 1983.
15. In Company application No. 136 of 1988 and Company application No. 137 of 1988, which I am disposing of, certain ad interim orders were made to which reference is necessary. On April 11, 1988, Variava J. appointed the official liquidator as the ad interim administrator of the company. This was done without notice to the respondents. In Appeal No. 523 of 1988 form the the order of Variava J., the appointment of the official liquidator as the ad interim administrator of the company was set aside and the appeal was allowed only on the ground that the respondents were not given reasonable opportunity of being heard before the order dated April 11, 1988, was made. Once again, Company applications Nos. 136 of 1988 and 137 of 1988 came up before Variava J. for ad interim reliefs. In a reasoned order dated April 28, 1988, he held that, prima facie, the repsondents actedd contray to this court's order and in a manner prejudicial to the interest of the company. He, therefore, restrained the respondents form operating any bank accounts without the written consent of petitioner No. 2 and respondent No. 5 who held the power of attorney. In other words, the consent order made in Company Petition No. 393 of 1983 was reaffirmed. Against this order, the respondents preferred the (Lodging No. 711 of 1988). No order except its adjournment has so far been made in this appeal.
16. Learned counsel for the petitioners urged that the circumstances set out above about which there is no dispute have created a situation which demands the appointment of an administrator of the company under section 402 of the Act.
17. Secondly, he urged that the contracts with VIP Enterprises and REK Exhibitors are illegal and void and should be set aside.
18. On the other hand, counsel for the respondents urged that the consent terms left the management of the company with the board of directors. The power of attorney was only for the purpose of facilitating the management. the board of directors in which respondents Nos. 2 to s16 had a majority has exercised its authority under the law. If the petitioners will have a grievance, the remedy lies beyond the consent order of the court.
19. Secondly, counsel for the respondents urged that the consent order dated March 29,1984, was made in Company Petition NO. 393 of 1983. The petition has been disposed of by a consent order. These company application do not seek to enforce or implement the order dated March 29, 1984. Therefore, these applications are not maintainable under section 402 of the Act.
20. On behalf of VIP Enterprise and REK Exhibitors, learned counsel urged that these firms entered into contracts with the company without notice of the orders of this court. the contracting parties have entered into tracts, no reliefs affecting their contracts with the company should be granted.
21. On these arguments, three questions arise for consideration:
(i) Whether , in the three questions arise for consideration.
(ii) Whether having regard to the provisions of section 402 of the Companies Act and the facts of this case, these applications, are maintainable?
(iii) Whether the contracts dated March 20, 1987. and February 12, 1987, granting playing time to VIP Enterprises and REK Exhibitors, respectively are illegal or void?
22. In regard to the first question, I do not propose to repeat the facts on the basis of which the appointment of an administrator is sought. The thrust of the argument of learned counsel for the petitioner is that the respondents, by their conduct, have created such a deadlock that it is impossible to manage the affairs of the company. Respondents No. 2 to 16 and the directors belonging to their group are in the majority. They have, by unilateral acts and in breach of the court's order, denied to the petitioners who represent the minority shareholders the right to participate in the affairs of the company. In the suit filed in the Bombay City Civil Court, respondent No. 16, who appeared without authority, did not defend the claim of VIP Enterprises and by collusion allowed the appointment of a receiver. They committed contempt of this court once and repeated it thereafter.
23. In may opinion, the affairs of the company are being conducted in a manner detrimental to the company's interest. The parties do not see eye to eye. The rival groups, with their daggers drawn, are unable to manage the affairs of the company without causing loss to the company. The facts setout in the foregoing paragraphs demand court's interference by appointing an administrator of the company.
24. I will now consider the second point. Section 397 of the Act empowers the court to 'make such order as it thinks fit'. But, before making the order, the court has to form an opinion, inter alia, 'that the company's affairs are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members. Having formed such an opinion, the court is required to consider whether complained of.' I have gone through Company Petition is necessary in order to understand what 'the matters complained of' were and what was the order made by the court..
25. Briefly stated, the petitioner complained that the company entered into `playing time' agreements with Mangatram (500 weeks) in 1974, with Naresh Pictures (50 weeks) in February, 1981. The petitioners who are unable to participate in the day to day management of the company found that respondents Nos. 2 to 5 and 16 wrongfully and in breach of trust caused loss to the company and the petitioners. In several `playing time' agreements, respondents Nos.2 to 5 and 16 received indirect secret monetary advantage and profits. The respondents fabricated the minutes of the meeting at which the petitioners were likely to probe into the affairs of the company. On these averments, the petitioners sought directions of the court under sections 397, 398 and 402 of the Companies Act, the appointment of an administrator for the company in the place of the board of directors, an injunction to restrain respondent No. 5 from exercising powers as a constituted attorney of the company, and an injunction to restrain the respondents from entering into any `playing time' agreements without the written consent of the petitioners. These were the 'matters complained of'. They were disposed of by the consent order dated March 29, 1984, summarized in paragraph 2 of this judgment the result of which is as under :
(a) By the consent order, the company contained 'to be managed' by the board of directors. Certain differences only were to be decided by Gala/Anthony Lewis.
_________________________________________________________________ 1. '397(2). If, on any application under sub-section (1), the court is of opinion (a) that the company's affairs (are being conducted in a manner prejudicial to public interest or) in a manner oppressive to any member or members, and
2. 397(2). (b) that to wind up the company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a winding up order on the ground that it was just and equitable that the company should be wound up ;
the court may, with a view to bringing to an end the matters complained of, make such order as it thinks fit.'
(b) The petitioners were content with the restoration of the power of attorney in favour of petitioner No.2 and respondent No.5 jointly.
(c) In respect of the main complaint in Company Petition No. 393 of 1983 that the respondents were making secret profits, no order was made in the consent terms.
(d) The only remedy or relief accepted by consent of the parties was a reference to the mediation or the determination by Gala and in his absence, Anthony Lewis.
26. This is how the court, by the consent order, brought to an end the matters that were complained of.
27. Section 398 of the Act enables the court to make similar orders with a view to bringing to an end the matters complained of.
28. Significantly, in Company Petition No.393 of 1988, the petitioners sought reliefs under section 402 of the Act also. Therefore, it is reasonable to hold that the order, in accordance with the consent order which provided for the reference of the disputes to the determination of Gala and in his absence, to Anthony lewis, was an order under section 402 of the Act. It provided for 'the regulation of the conduct of the company's affairs in future' through reference of the dispute to the determination of Gala and in his absence, to Anthony Lewis.
29. Against this background of the nature of the enactment and facts of this case, I am to consider whether section 402 of the Act permits these two applications. While keeping the generality of the court's powers under section' meaning thereby the order under sections ' meaning thereby the order under sections 397 and 398, may provide for 'the regulation of the conduct of the company's affairs in future'. The words quoted by me are significant for the purpose of construction of section 402 of the Act. Section 402 when analyzed resolves itself into the following elements :
(a) Under section 402 of the Act, the court possesses the power to regulate the conduct of the company's affairs in future- implying there by that the court which decides the application under sections 397 and 398 does not lose its seisin merely because the petition has been disposed of.
(b) But the regulation of the conduct of the affairs must be provided for by the 'order under either section' implying thereby that the court, by its order under section 397 or 398, must retain seisin over the matter.
30. Thus, it is clear that while the court has authority to regulate the conduct of the company's affairs not in the present but also in the future such power must be exercised by the order made under section 397 and 398 of the Act. That is why section 402 which confers this power stipulates that the regulation of the conduct of 'the company's affairs in future' must be done an order under section 397 or section 398 of the Act. When the statute uses the words 'any order under either section', it means that the machinery or the mode for regulating the conduct of the affairs in future must be provided by the order which disposes of the petition under sections 397 and 398. This is not to suggest that upon termination of the petition under sections 397 and 398, the court loses its control over of the petition under sections 397 and 398, may retain such control or seisin over the future events by making appropriate provision in the order.
31. In the present case, the court did all that it was called upon to do on March 29, 1984. For example, it put an end to the matters complained of by restoring the power of attorney jointly in favour of petitioner No.2 and respondent No.5. Secondly, the future conduct of the affairs of the company in relation to the oppression and mismanagement complained of, was regulated by the clause which enabled the parties to refer the difference or dispute to the determination of Gala/Anthony Lewis.
32. Did the court making the consent order retain seisin over the matters which might arise in future What was the nature and extent of the seisin ?
The word 'seisin' is generally use in the context of property. It means a possession, control or seizure.
33. The court, by the consent order, enabled a reference to the determination of Gala/Anthony Lewis of differences in relation to-
(a) disposal of lease licence or encumbrance or parting with possession of property ;
(b) grant of play time rights;
(c) borrowing or lending money ;
(d) appointment of directors ; or
(e) any matter of substance and/or significance to the company.
__________________________________________________________________ 1. (i) The Oxford English Dictionary, volume IX, 1978 edition.
seisin- (a) To give seisin of (property) ; (b) To invest with the seisin of property, to put in possession ; (c) To seize, take hold of, to take root.
(ii) New Webster's Dictionary of English Language, 1971 edition.
seisin - The possession of chattels or land, the possession or right to possession of a freehold estate.
2. Clause 2 of the minutes of the consent order.
34. As the consent order records that the board of directors managed the affairs of the company, only;y narrow area of specified disputes was left to the decision of Gala/Lewis. Thus, the court which made the consent order limited its control over the matter to the reference to Gala/Anthony Lewis. this is the limit of the seisin the court retained after the termination of Company Petition No. 393 of 1988. In the exercise of such seisin, this court can issue instructions to Gala/Anthony Lewis as was done by the Delhi High Court in the case of Lord Krishna Sugar Mills Ltd. [1974] 44 Comp Cas 210 or as in the case of Richardson and cruddas Ltd., In re : AIR1959Cal695 , to reconstitute the machinery (Gala/Anthony Lewis) already crated by it. The court, in exercising its jurisdiction under section 402, cannot travel beyond this limit.
35. Now, consider what the petitioners seek in these applications. they want me to -
(a) appoint an administrator of the company in 'Place of the board of directors';
(b) declare void the agreements dated March 20, 1987, and February s12, 1987, in favour of VIP Enterprises and REK Exhibitors, respectively, and
(c) cancel the agreements referred to in (b) above.
36. Since the court has, by the consent order dated March 29, 1984, terminated the petition under sections 397, 398 and 402 of the Act, It has made an order under these sections. The consent order is an 'order under either section'' 1 within the meaning of section 402 of the Act. the count end the disputes complained of '2.
37. Now, in these two judge's summonses, the petitioners want me to exercise the power under section 402 of the Act. I am not called upon to make any order under sections 397 and 398. The petitioners' compliant arises out of events subsequent to the disposal of the petition under sections 397 and 398. The order by which Company Petition No. 393 of 1988 was terminated dopes not extend to the reliefs prayed for in these applications.
38. Now, consider the three decisions cited by learned counsel for the petitioners. Each of these cases demonstrates that the court was acting in pursuance of its previous order and was exercising seisin which it had retained. In Richardson and Cruddas Lt., In re [1959] 29 Comp Cas 549 the Life Insurance Corporation of India made an application under sections 397, 399, 402 and 403 of the Companies Act for an order that the special officer already appointed may be authorized to enter into an arrangement with the State Bank of India by which all the accounts, in fact, standing in the name of Richardson and Cruddas Ltd., may be consolidated. the reference to section 403 of the Companies Act suggest that the petition under sections 397 an d 398 was still pending when the Calcutta High Court made the order. One of the orders sought by the application was that the special officer may be authorized to constitute and advisory board. The special officer was already appointed during the tendency of the petition. The Calcutta High Court proceeded to hold that the powers of the court under section 402 of the Act are so wide that the court may make any order for regulation of the conduct of the company's affairs. The Calcutta High Court did not hold that an order under section 402 of the Act can be made irrespective of whether the court is seized of the matter or not. The facts of that case reveal that when the court made the order under section 402, not only was the main petition pending but the court was merely called upon to effectuate its initial order appointing a special officer by widening his authority of management by appointing an advisory boar. the order was within the scope of the earlier order.
39. In Lord Krishna Sugar Millas Ltd. v. Smt. Abnash Kaur , the winding-up petition filed by Abnash Kaur under section 433(f) of the Companies Act was disposed of on May 27, 1971. Instead of making the order of wining up, the court granted the reliefs under section 397, 398 and 402 against which an appeal was preferred and was pending on the date on which the Delhi High Court made the order. For the purpose of relief under sections 397, 398 and 402, the Delhi High Court constituted an interim board of management of the company the constitution of which was changed by the appellate bench by an ad interim order. the application out of which the judgment in Lord Krishna Sugar Mills Ltd. arose was made because of certain instructions sought by the board of management. the court held that it was resolve the problems of the interim boar. The facts which went into the making this judgment were -
(a) the interim board that had been appointed by the court was to function till such time as provided for in the judgment dated May 22, 1971.
(b) Therefor, the board functioned under the supervision of the court.
(c) Consequently, the court retained the supervisory power over the board.
40. These facts which are clear form the judgment leave no doubt that an order under section 402 of the Act may be made at any time provided the court, by its order under sections 397 and 398, retained control over the matter. The Delhi High Court has not held that an order under section 402 can be made at any time irrespective of whether the court is seized of the matter or not.
41. Bhagwati Prasad Bajoria v. British India Corporation Ltd., : AIR1964All75 , is the last judicial decision relied upon by the petitioners. On February 14, Companies Act, appointed an interim committee of management under the supervision of the court. the company was expected to committee was to expire on January, 31, 1963. Such a long term was fixed because it was apprehended that Haridas Mundhra might interefere with the sought curtailment of the period of supervision by the committee because the apprehension, on the basis of which the longer period was fixed, had ceased to exist. It is in these circumstances that the court granted the application under section 402 of the Act. The Allahabad High Court acted while it was still seized of the matter and the the term fixed by it had not expire.
42. None of these decisions supports the petitioners' contentions. IN my opinion, the words 'any order under either section' clearly suggest only one construction, viz., that if the petitioners want to make an application under section 402 of the Companies Act, they can do only if the order made under sections 397 and 398 leaves the doors open for such an application.
43. My conclusions are these:
44. The future conduct of a company's affairs can be regulated by the order made under section 397 or 398 of the Act and not by independent proceedings. This does not, however, men that such an order under section 402 cannot be made subsequent to the termination of the petition under section 397 or 398 of the Act. An order regulating the conduct of the company's affairs in future may be made under section 402 after the disposal of the petition under section 397 or 398 of the Act, provided the circumstances of the case show that, by its order under section 397 or 398, the court had retained seisin over the matter. Whether the court has retained session depends upon the fats and circumstances of each case The cases of Richardson and Cruddas Lt. [1950] 29 Comp Cas 549 (Cal), Lord Lrichna Sugar Mills Ltd. [1974]44 Comp Cas 210 and Bhagwati prasad Bajoria, : AIR1964All75 , illustrate situations where seisin may be inferred. In order words, the order under section 397 and /or 398, by its very nature, must leave the doors open for future application under section 402 the Act.
45. Having regard to the discussion in paragraphs 16 to 22 above an the facts of this case, I am of the opinion that the court which made the consent order on March 29, 1984, did not retain seisin over the matter to which these application relate. The relief by way of appointment of an administrator which is prayer (a) in these applications, the cancellation of of agreements with third parties which is the subject-matter of prayers (b) and (c) of these application, are not matters over which this court, while disposing of applications under sections 397 and 398 of the ?Act, retained its seisin Company Petition No. 393 of 1988 contained a prayed for appointment of an administrator and related to similar agreements with exhibitors. Yet, the consent order did not provide for these reliefs. The only order regulating the affairs of the company in future was by reference of specified disputes the affairs of the company in future was by reference of specified disputes to the determination of Gala/Anthony Lewis. In other words, the matters to which these application relate. For these reasons, these applications are not maintainable at all.
46. Are the contracts granting 'Playing to VIP Enterprises and REK Exhibitors illegal or void? This is the third question raised in these applications. It is common ground that VIP Enterprises and REK Exhibitors had no notice of the petition under sections 397 and 398 or the subsequent proceedings to which I have made reference in this judgment. There was a resolution of the company which empowered respondent No. 16 to enter into such agreements. Whether the power of attorney granted in the name of respondent No 16 was in accordance with the consent order or whether it was in violation of the orders of this court are facts which were unknown to VIP Enterprises and REK Exhibitors. They are entitled to rely upon the authority granted by the company to respondent No. 16. For the was a vial authority. It is not the petitioners' case that the contracts are vitiated by mistake, misrepresentation, fraud or coercion. Had the exhibitors been put to notice of the the disputes in the company petition or the subsequent proceedings, the matter would have been different.
47. In my opinion, the contracts cannot be declared void or illegal.
48. For these reasons, I dismiss the judges summons being Company Application No 136 of 1988 and the judges summons being Company Application No 137 of 1988.
49. The petitioners shall pay the costs of the company and the costs of VIP Enterprises, as also REK Exhibitors.
50. All the ad interim orders made by this court on these applications shall continue for a period of four weeks form today.